Do foreign investors developing wind or solar power projects in Vietnam enjoy import tax incentives for imported machinery and equipment? The answer is Yes — but the incentive applies to the PROJECT, regardless of the investor’s nationality. Vietnam’s import-export tax law has no separate regime for “equipment of foreign investors”; a foreign investor enjoys the same incentives as a domestic investor if the project meets the conditions.
The current investment law framework
Any analysis of investment incentives must rely solely on the current framework: Investment Law 143/2025/QH15 (effective 01/3/2026, replacing Law 61/2020/QH14) and Decree 96/2026/ND-CP (31/3/2026, effective from issuance). Decree 96/2026 wholly replaces Decree 31/2021, Decree 19/2025 and Decree 239/2025 (Clause 2, Article 111 of Decree 96/2026) — these older instruments may no longer be cited as current legal bases.
Renewable energy projects fall within investment-incentive sectors: Appendix 2 of Decree 96/2026/ND-CP (List of sectors eligible for investment incentives) includes “energy from wind, solar, tidal, geothermal and other renewable sources”.
Three independent import tax exemption channels for renewable energy equipment
Under the Law on Export and Import Taxes 107/2016/QH13 (see consolidated document 96/VBHN-VPQH dated 31/3/2026), a qualifying renewable energy project may simultaneously apply three independent exemption channels:
Channel 1 — Exemption for goods creating fixed assets (Clause 11, Article 16)
Import tax exemption for machinery and equipment; components, parts, disassembled accessories and synchronous assembly parts; raw materials and materials for manufacturing machinery and equipment; specialised means of transport in technological lines; and domestically unproducible construction materials — used to create fixed assets of new and expansion investment projects. Details in Article 14 of Decree 134/2016/ND-CP (amended by Clause 7, Article 1 of Decree 18/2021).
Channel 2 — Exemption for raw materials and components for 05 years (Clause 13, Article 16)
Domestically unproducible raw materials, materials and components of projects in specially incentivised investment sectors, extremely disadvantaged areas, high-tech enterprises, science-and-technology enterprises and science-and-technology organisations are exempt from import tax for 05 years from the start of production. Details in Article 15 of Decree 134/2016/ND-CP (amended by Clause 8, Article 1 of Decree 18/2021). After the 05-year period: within 30 days a new customs declaration must be registered and tax declared and paid on unused materials. (Note: this is Clause 13 of Article 16, not Clause 12 — Clause 12 covers plant seeds and fertilisers.)
Channel 3 — Exemption for specialised renewable-energy production equipment (point (a), Clause 19, Article 16)
Imported specialised machinery, equipment, means, instruments and materials not yet domestically producible for renewable energy production. Details in Article 25 of Decree 134/2016/ND-CP, amended by Article 3 of Decree 05/2025/ND-CP (effective 06/01/2025): the basis for determining “not yet domestically producible” follows the competent state authority’s regulations; criteria for specialised equipment follow environmental protection law; dossiers and procedures follow Article 31 of Decree 134/2016.
Three incentive layers must not be merged
Enterprises must clearly distinguish three independent incentive layers: import-export tax incentives (Clauses 11, 13 and 19(a) of Article 16 as above) differ from corporate income tax incentives for renewable energy, and from high-tech incentives under the High-Tech Law 133/2025. A wind or solar project is not automatically a high-tech project. Each import tax exemption channel has its own conditions — only channels whose conditions are fully met may be applied; do not assume “everything is exempt”.
Procedures for enjoying investment incentives
Under Article 24 of Decree 96/2026/ND-CP, investment incentives are recorded in the Investment Policy Approval Decision, the Investment Registration Certificate or the Investor Approval Decision; investors complete incentive procedures with the authority applying each respective incentive. Foreign investors must additionally satisfy market-access conditions for conditional sectors (if any) under Investment Law 143/2025.
Need to determine which import tax exemption channel your renewable energy project qualifies for and prepare the exempt-goods list dossier? Contact FLAT Law Firm for advice.
The information above is for reference only and does not constitute legal advice.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.